The owners, who wanted to miss two months of games all along and even went as far as investigating this summer how they'd legally go about filling their arenas during nights when they "had" NBA home games in November and December. (The answer: You can't schedule other events in your arena without violating labor laws. But if you want to schedule a musical act for two nights before a home game, then "play it by ear" and "add" a third night at the last minute — wink, wink — that's ostensibly legal.) These guys are prepared to reset their system, break the players and reposition themselves for the rest of the decade, when attendance revenue will continue to slide in the HD/Internet/Fun-To-Be-Home Era and small-market teams will continue to suffer without contraction or revenue sharing (neither of which can happen without a more favorable CBA). There was no chance they were playing 82 games this year. It was a charade.

If the season is canceled and players union is disbanded I would think the labor laws would no longer apply. Since I am not a lawyer I really shouldn't speak on this, but my assumption is with no union there are no rules/laws holding the owners of the arenas back. If I am wrong, then the owners that don't own the arena would be on the hook for paying 41 games of rent even though the games were not played.. Wow.. That would hurt..

In any case, my original post was intended to outline why the owners were in a much better situation then the players. It reminds me of a bit from a Chris Rock stand up that went something along the lines of prenuptial agreements were more important for people with less money then the super rich. He stated that half of 100k leaves you with 50k, but half of 10mm still leaves you a millionaire. The fact is, the owners can outlast the players. Even if the owners only other source of income is interest it will still be way more then enough to live a very comfortable lifestyle. Owners have depreciating assets they can write off over time and have salvage value. Players are depreciating assets with no salvage value (with the exception of the Greats, etc. MJ).. Today, if I am a player I am going back to the Union and saying "I think we made a mistake"..

In the case of the players, pride won't pay their bills.
This whole thing is pretty confusing to me personally. Growing up in blue-collar Michigan, I've always sided with labor on issues like this. I'm conflicted and unsure.

Keep in mind the total salary for the team is upwards of $60mm per season, and the $78mm represents the MAX they could make from attendance. So the best case scenario is a $18mm profit (only speaking in terms of salary minus attendance). We both know that they wouldn't have sold out all 41 home games. So not only do you have a tax write off he still has the opportunity to rent out the Palace for other events to make up some of the $78mm he will lose if the season is lost.

I think the most shocking statement:
"The league already has filed a pre-emptive lawsuit seeking to prove the lockout is legal and contends that without a union that collectively bargained them, the players’ guaranteed contracts could legally be voided. That case was filed in New York, where the 2nd Circuit Court of Appeals has issued several rulings in the NBA’s favor over the years."

If I am a player and the bolded statement is even 40% probable, I am begging the union to just accept the offer. However, like me, you are a Piston fan you are thinking is there an easier way of getting rid of Rip, Gordan and Charlie V without having to pay them a dollar more? Can you imagine if this played out? It would help the Pistons even if they couldn't hold on to a single player (although I think Greg Monroe would stick around). At least we would be in a position to start over...

I remember seeing some numbers claiming the attendance income being about 1/3 of the teams basketball related income on average. I think it was something like 30% from tickets, 30% national tv, 15 percent local tv, 5 percent merchandise and 20 percent sponsorship but I don't now how reliable the source is.

I remember seeing some numbers claiming the attendance income being about 1/3 of the teams basketball related income on average. I think it was something like 30% from tickets, 30% national tv, 15 percent local tv, 5 percent merchandise and 20 percent sponsorship but I don't now how reliable the source is.

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I found the following (in regards to TV), it is a bit dated. If you take 2.2 billion and divide by 30 (number of teams) and divide it by 6 (number of years the 2.2 billion is for) --> This representing the TNT contract and doing the same for ABC/ESPN and adding you get ~ $25mm per year. I assume that the contracts both went up for 2008/09 through ??

$25mm per year for national tv just doesn't sound like a lot to me. Maybe I did the math wrong. If I didn't it is starting to become very clear why so many teams lose money.

I think we estimated the most the Pistons would make off of ticket sales, merchandise, food, parking, etc. was $78mm. Add that to $25mm (national tv) and let's just assume another $25mm for local TV and sponsorships you are talking about $128mm revenue - Players salaries ~$60mm minus coaching staff/trainers $7mm minus Pistons executives, including scouts ~$7mm minus cost of operations (including insurance) $6mm.

$128mm - 90mm = profit of $38mm. Keep in mind that the costs are fixed, but the revenues are variable (except for the tv contracts). There is little room for error.. And this is a quick study for the Pistons who have a GREAT fan base for a mid market team.. Of course, the calculation is based on a lot of assumptions so I could be WAY off.

** I am totally guessing on the combined salaries of the coaches/trainers, Executives/Scouts and cost of operating the Palace 41 games per year (but I believe my guesses are pretty conservative).

Nemo, this is where I think you are wrong. The arenas overseas do not accommodate the same number of fans as we do here in the US. As for the merchandise dollars you might be correct in regards to the EU, but since China has no copyright laws I can't see a scenario where they generate much revenue from sales..

Also keep in mind that if you play overseas (let's say Europe) as an American you are going to pay a much higher tax then here in the US. That $5mm quickly becomes $2.5mm, not to mention Hedging strategy. Sorry this is something near and dear to my heart (I am a treasury consultant), so the player (or manager) must decide how are they going to hedge the Euro against the dollar, and how much of it should be hedged. It doesn't sound like a big deal, but if there is a 4% swing between the Euro and dollar you are talking about a nice chunk of change, not to mention a player with a heavily reduced salary will be looking at every possible way to earn (or at least not lose) any additional coin.

I believe in free market, but the fact is the NBA is the highest paying league going today. If the players chose to play elsewhere they will lose a considerable amount of money in opportunity costs. Maybe one day a league will be formed that competes with the NBA, but I would guess that no active player will be playing by the time that happens. At the very least the NBA has a distribution channel that his HUGE and took 64 years to get where it is today.

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Thanks for the info. If I were a player...I would still go just to make a point. That being the NBA player is a more valuable marketing tool than in any other league. I would also like to believe that if my salary went from 20 million to 5 million...that I would be just fine.

For me...there are more important things in life than just money. My move to Montana reduced my salary by 40%...but I made the quality of life choice...and I'm much happier...except I live closer to Darth...

Thanks for the info. If I were a player...I would still go just to make a point. That being the NBA player is a more valuable marketing tool than in any other league. I would also like to believe that if my salary went from 20 million to 5 million...that I would be just fine.

For me...there are more important things in life than just money. My move to Montana reduced my salary by 40%...but I made the quality of life choice...and I'm much happier...except I live closer to Darth...

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I agree with you, but as Patrick Ewing said "Sure, wemakea lot of money, but wespenda lot, too."... Not to mention this whole argument between the players and owners is about money. Sadly every other labor union in the US has made serious concessions (specifically school teachers). I think we can all agree a teacher is far more important then an NBA player.. It is time for the NBA players to bite the bullet. Maybe the economy will be better the next time they negotiate the contract and can get a better deal.

I like the comparison to teachers. Teachers have indeed made some serious concessions (in Michigan) but the palyers have already agreed to make some serious concessions too. The owners have spent their way into this mess and the players are the ones making all the concessions. Where is the responsibility on the owner's part?

I agree with you, but as Patrick Ewing said "Sure, wemakea lot of money, but wespenda lot, too."... Not to mention this whole argument between the players and owners is about money. Sadly every other labor union in the US has made serious concessions (specifically school teachers). I think we can all agree a teacher is far more important then an NBA player.. It is time for the NBA players to bite the bullet. Maybe the economy will be better the next time they negotiate the contract and can get a better deal.

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Not that I am supporting the players as I think they should have taken the deal and they may have taken the deal had the union put in to a vote. But the NBA had a banner year last year in sales. Hard to compare that to the shrinking budgets teacher unions have had to deal with.

The owners spent themselves into this mess. Who benefited? The players with outsized contracts.
The owners will now un-spend themselves out of this mess. Who will take it on the chin? The players with outsized contracts.

I think the result SHOULD be something similar to what the NHL (and , to a degree the NFL) did. A salary cap of some sort to enable the smaller cities to compete with the big ones. If the NBA could develope the competitive balance of the NFL, it would be great fun for us fans! And the players would make out just fine.

I think the players union has a good point to challenge the owners for not negotiating in good faith. In a real negotiation, you concede or stand firm. You can't make an offer and then, if it's not accepted, make a worse offer. I think the NBA players have a better case than the NFL players broke off negotiations to litigate. The NBA players are litigating after the owners stopped honestly negotiating.

I think the players union has a good point to challenge the owners for not negotiating in good faith. In a real negotiation, you concede or stand firm. You can't make an offer and then, if it's not accepted, make a worse offer. I think the NBA players have a better case than the NFL players broke off negotiations to litigate. The NBA players are litigating after the owners stopped honestly negotiating.

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Not only that but Stern himself said that there would be no more negotiating.